Beneficial Low Mod Rates for Workers Compensation Insurance

What’s a low experience modification rate for workers compensation insurance, why is it beneficial, and how can you secure one for your business? In this quick article we’ll take a look at workers comp EMR, or Experience Modification Rates, and how they impact what you may be paying for your policy.

Experience Modification Rates are essentially multipliers that alter your business’s starting workers comp premium. The starting factors are your business’s industry, and the size or payroll of your company. From this you’ll get an initial premium, and in most cases, an initial modification of 1.0. That translates to 100% of the premium price, so it’s actually not modified. You just pay the full, initial premium price. This is considered an average risk business.

When applying for new rates down the road, your EMRs will be determined by your previous three years. Exactly how these calculations are conducted depends on a huge number of variables, but essentially, the more claims you’ve filed, the higher your rate will be, and the fewer claims, the lower.

If you have a high modification rate for workers compensation of 1.25, then you’re deemed as riskier than average, and have to pay 125% of that initial premium. That’s a huge added cost for your business. Conversely, a low mod rate of .80 will mean you only have to pay 80% of that premium, giving you a huge savings thanks to you being deemed a less risky business than average.

One way to try to secure a lower mod rate on workers compensation is to get your policy from a PEO provider in your state. You may then be able to utilize that company’s workers compensation plan and mod rate, which should offer a substantial savings with a superior low EMR.

Of course, always keep in mind that what you pay will depend on how your state sets prices, and that your state may also have any number of different regulations or requirements in place than other states. That’s why you should never make any assumptions, and always work with an experienced pro. Give us a call at 407.272.1976 and we’ll guide you through the process and make sure you get the best possible rate on your workers comp, including beneficial EMRs when applicable.